What Construction Can Continue
in Ontario after April 17, 2021?
An Overview and Discussion
Kennaley Construction Law
On Friday, Ontario’s Premier announced that due to the assent of a third-wave of the COVID virus, construction activities in the Province will be limited through an amendment to Ontario Regulation 82/80 of the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020, passed by an Order in Council made today (April 17, 2021).
Schedule 2 of the Regulation lists the businesses that may be open in the “Shutdown Zone” for areas in Stage 1 (which currently encompasses the entire province). Prior to April 17, 2021, s.43 of the Regulation provided that all construction activities or projects and related services were allowed to proceed. As of April 17, however, s.43 is significantly amended.
The full text of the amended s.43 is set out at the bottom of this article. What immediately follows is intended to summarize the shutdown provisions as they relate to construction. The text of the Regulation, or counsel, should be consulted to assess its application in any particular case. We will begin with the broad categories of what is allowed to continue, without limitation.
First, all “residential construction activities or projects and related services” are allowed. In his press-conference on Friday, the Premier specifically indicated that construction on hotels would be suspended. This provides some insight into how the attorney-general might interpret “residential construction”.
Second, “landscaping services” can continue by virtue of s.15 of the Schedule. Although not clear, in our view it appears that this applies to landscape maintenance, and not “hard” landscape construction. As “landscaping services” is coupled with “snow clearing” at s.15 (and not included in the exemptions set out in the s. 43 ‘construction section’, we suggest that only maintenance was intended Although not clear, we believe that those who perform landscape construction in a non-residential context that is not otherwise exempt by the Regulation should proceed with caution as they will likely be in violation of provisions.
Third, “maintenance, repair and property management services that manage and maintain the safety, security, sanitation and operation of institutional, commercial, industrial and residential properties and buildings” are allowed to continue. This is provided at s.35 of the Regulation (and not at the construction section, s.43).
Fourth, virtually all site services work may continue. Specifically, construction to “prepare a site for an institutional, commercial, industrial or residential development, including any necessary excavation, grading, roads or utilities infrastructure” is allowed by virtue of s. 43.
Fifth, all construction funded (in whole or in part) by the Federal or Ontario Governments, by an agency of those governments or by a municipality is allowed. In addition, construction intended to provide shelter or supports for vulnerable persons or affordable housing is allowed so long as it is funded in whole or in part by specified persons, a registered charity or a non-profit corporation. As regards these types of potential projects, we recommend that contractors seek clarity from the Owner on the nature of the funding, towards determining whether or not the construction is exempt from the Regulation.
Lastly, where construction needs to be suspended, work may continue so as to close the site, “to ensure ongoing public safety”.
As regards specific areas of the non-residential construction sectors of construction, the amended s. 43 allows construction to continue which:
1. is associated with the health care or long-term care sectors, including construction of or on spaces that “could be repurposed for health care space”;
2. ensures safe and reliable operations of, or provides new capacity in municipal or provincial infrastructure (which includes the transit, transportation, resource, energy and justice sectors);
3. supports or provides new capacity in the “supply or resources”, schools, colleges, universities, specified child care centres or the generation, transmission, distribution or storage of electricity or natural gas;
4. is required for the maintenance and operations of petrochemical plants and refineries or in “significant” industrial petrochemical projects where preliminary work has already commenced;
5. is required for “industrial” construction necessary for the production, maintenance or enhancement of PPE and specific medical devices “directly related to” combatting COVID;
6. will provide additional capacity in the production, processing, manufacturing or distribution of food, beverages or agricultural products; or
7. was already commenced and which will provide additional capacity in the operation and delivery of IT or for businesses that provide logistical support, distribution services, warehousing, storage or shipping or delivery services, or that extract, manufacture, process and distribute goods, products, equipment and materials.
Much of the above formed part of the Regulation passed during the previous shutdown, and confusion remains. It is, again, not clear what construction “associated with the healthcare sector” means. There is no question that hospitals, clinics, or doctor’s offices, etc., are part of this sector. The sector also probably includes services related to massage therapy, mental health care, addiction treatments and homeopathic care, etc. – ie. any service that is recognized and regulated by the province as a health care service. It is not clear, however, how far the “healthcare sector” extends.
It is also not clear that construction in relation to a pharmacy, medical supply warehouse, cannabis facility or health food store will be allowed to continue. While it would appear that these are most certainly “associated with the healthcare sector”, the Regulation goes out of its way to specify where construction in other areas of the sector will be allowed to continue, for example in relation to PPE equipment, ventilators and other identified products “directly related to combating” the pandemic. Because the Regulation specifically limits construction in relation to such vital products to “industrial” construction or structures, construction on non-industrial stores and distribution facilities for other, unspecified healthcare purposes, is most likely prohibited.
Confusion will also again arise over the intended scope of construction, expansion, renovation or conversion of space that “could be repurposed for health care space”. Clearly, in a pandemic, federal, provincial and municipal emergency response plans will generally incorporate hockey arenas, community spaces, university halls and libraries, etc., for various healthcare purposes during an emergency. The Regulation, again, offers no guidance as to what construction might meet the test. Some might argue, at the logical extreme for example, that if the space under construction is zoned to include for doctor’s offices, the space could be repurposed so as to meet the definition, such that the work can continue.
There are, of course, a range of businesses that are allowed to continue to operate during the shutdown period. In our view, unless it is maintenance or repair allowed under sections 15 or 35 of the Regulation, construction activities must be expressly included in s. 43 to continue. It is not enough, we suggest, that the construction be at or for a business that is itself allowed to operate during the lockdown. Thus, for example, it is not enough to be performing construction for example at a bank, a laundry mat or an automated car wash (among the long list of permitted businesses) unless the work is otherwise specifically allowed by s. 15, 35 or 43.
We note that the Premier’s office has announced that 200 workplace inspectors have been dispatched to visit 1,300 construction sites across the province towards enforcing the Regulation. In addition, a further Regulation has been passed which gives police and by-law offices extended powers to stop persons and make inquiries as to why they are away from home during the shutdown period. It does appear that, this time around, the Province is more determined to ensure that the Regulations are complied with, from an enforcement perspective.
Last year, the Province set up a Stop the Spread Business Information Line, at 1-(888)-444-3659. That line remains available as a resource to (hopefully) address any questions you might have in any particular circumstance. We will also be reviving our COVID-19 seminars which were popular last year. More information in that regard will follow in a further blog or article. Stay safe!
Kennaley Construction Law
The full text of the amended s.43 of the O. Reg. 82/80 follows:
“Section 43 of Schedule 2 to the Regulation is revoked and the following submitted (formatting does not reflect the original):
43. Construction activities or projects and related services, including land surveying and demolition services, that,
(a) are associated with the health care sector or long-term care, including new facilities, expansions, renovations and conversion of spaces that could be repurposed for health care space;
(b) ensure safe and reliable operations of, or provide new capacity in,
(i) municipal infrastructure, or
(ii) provincial infrastructure, including but not limited to, the transit, transportation, resource, energy and justice sectors;
(c) support the operations of, or provide new capacity in, electricity generation, transmission, distribution and storage, natural gas distribution, transmission and storage or in the supply of resources;
(d) support the operations of, or provide new capacity in, schools, colleges, universities or child care centres within the meaning of the Child Care and Early Years Act, 2014;
(e) are required for,
(i) the maintenance and operations of petrochemical plants and refineries,
(ii) significant industrial petrochemical projects where preliminary work commenced before April 17, 2021, or
(iii) industrial construction and modifications to existing industrial structures limited solely to work necessary for the production, maintenance or enhancement of personal protective equipment, medical devices such as ventilators and other identified products directly related to combatting the COVID-19 pandemic;
(f) would provide additional capacity in the production, processing, manufacturing or distribution of food, beverages or agricultural products;
(g) were commenced before April 17, 2021 and that would,
(i) provide additional capacity for businesses that provide logistical support, distribution services, warehousing, storage or shipping and delivery services,
(ii) provide additional capacity in the operation and delivery of Information Technology (IT) services or telecommunications services, or
(iii) provide additional capacity to, or enhance the efficiency or operations of, businesses that extract, manufacture, process and distribute goods, products, equipment and materials.
(h) support the operations of broadband internet and cellular technologies and services;
(i) are residential construction activities or projects and related services;
(j) prepare a site for an institutional, commercial, industrial or residential development, including any necessary excavation, grading, roads or utilities infrastructure;
(k) are necessary to temporarily close construction sites that have paused, or that are not active, to ensure ongoing public safety;
(l) are funded in whole or in part by,
(i) the Crown in right of Canada or in right of Ontario,
(ii) an agency of the Crown in right of Canada or in right of Ontario, or
(iii) a municipality;
(i) intended to provide shelter or supports for vulnerable persons or affordable housing; and
(ii) being funded in whole or in part by, or are being undertaken by,
(A) the Crown in right of Canada or in right of Ontario,
(B) an agency of the Crown in right of Canada or in right of Ontario,
(C) a municipality,
(D) a service manager as defined the Housing Services Act, 2011, or
(E) a registered charity within the meaning of the Income Tax Act (Canada), or
(F) a not-for-profit corporation.”
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This material is for information purposes and is not intended to provide legal advice in relation to any particular fact situation. Readers who have concerns about any particular circumstance are encouraged to seek independent legal advice in that regard.